Military retirement benefits differ from other government retirement benefits—and likewise, so do the timelines and eligibility rules in a divorce.
If a military pension is involved in your divorce, it’s important to understand some recent changes in eligibility, how military pensions differ from other government programs, health care benefit eligibility, disability payment rules and post-divorce timelines.
The 20/20/20 Rule
Under the 20/20/20 rule, a person must be married to the service member for at least 20 years; the service member has performed at least 20 years of service; and at least a 20-year overlap of marriage and military service exists. In these cases, the non-military spouse keeps all health insurance benefits, commissary and exchange for life. Upon remarriage or enrollment in an employer-sponsored plan, the ex-spouse would lose those health benefits.
Under the 20/20/15 rule, the non-military spouse would receive only one year of transitional health coverage and no commissary or exchange benefits. Upon remarriage or enrollment in an employer-sponsored plant, the ex-spouse would lose the health benefits.
Military Pension Rules Differ from Other Governmental Pensions
The military’s pension system has changed several times over the years, and it’s important to know and understand which one the military spouse falls under and how that affects your division of property. The military retirement system includes active duty, reservist and medical disability.
Depending on when the service member entered the service, they may be eligible or final basic pay, high-three, redux or a blended retirement system. Because each system has a different calculation formula, it’s important to know which formula to use when valuing pensions.
Disability Payments Cannot be Split
Under a 2017 Supreme Court ruling, military disability benefits are not considered marital property that can be divided in a divorce. However, the disability amounts are included in income valuation when determining spousal support and child support.
Specific Post-Divorce Timelines
Military health benefits have very specific timelines post-divorce. If enrolling in the Continued Health Care Benefit Program, a temporary transitional coverage for those not qualified under the 20/20/20 or 20/20/15 rule, a person has 60 days post-divorce to enroll.
The ex-spouse enrolling in either the full TRICARE coverage or one-year transitional TRICARE coverage under the 20/20/20 and 20/20/15 rules has a maximum of 90 days post-divorce to enroll.
Learn More about Military Divorces
When considering military retirement pay division, pension valuations, marital portion and other settlement agreements in a divorce, it’s important to work with a financial expert who understands military retirement systems and the timelines and rules in cases of divorce.
The decisions you make today will affect your financial future and retirement for the rest of your life. If you would like to discuss the financial details of a military divorce, get in touch with us today to schedule a consultation. Our office can be reached at 937-471-4654.
